Poor Credit Score? Here's How You Can Still Secure A Personal Loan

One can consider turning to non-banking financial companies (NBFCs), peer-to-peer lending platforms, or a guarantor to increase your chances of approval

Securing a personal loan with a poor CIBIL score can be challenging, but it’s not impossible. There are several options available in the market today to help you get the loan you need. However, you might have to consider turning to non-banking financial companies (NBFCs), peer-to-peer lending platforms, or a guarantor to increase your chances of approval. Alternatively, offering collateral can also help in getting the loan sanctioned.

Here are some options you can explore if you're facing challenges due to a poor CIBIL score:

Loan Against Fixed Deposits (FDs): If you have fixed deposits with a bank, you can take out a loan against them. Since the FD acts as collateral, the bank may be more willing to grant the loan despite a poor credit score.

Loan Against Collateral: If you own some fixed assets like real estate, you can secure a loan by using these assets as collateral. Lenders are generally more inclined to approve loans when there is collateral involved in the process, even if your credit score is less than ideal. This can be one of the best ways to explore a personal loan.

Non-Banking Financial Companies (NBFCs): Some NBFCs are more open to lending to individuals with poor credit scores. However, they may charge higher interest rates to offset the risk involved in the whole process.

Peer-to-Peer (P2P) Lending: P2P lending platforms connect borrowers directly with individual lenders. These platforms often have more flexible lending criteria compared to traditional financial institutions. This option is one of the ways you can get an easy loan with a bad credit score.

Guarantor: If you have a guarantor with a strong credit score, your chances of getting a personal loan increase. The guarantor agrees to repay the loan if you are unable to do so, which provides the lender with additional security.

While considering these options to secure a personal loan, carefully review the terms and conditions of any loan offer. Alternative lenders, in particular, might impose higher interest rates or stricter repayment terms.